Report of the American Bar Association Tax Section Task Force on the Tax Recommendations of the National Bankruptcy Review Commission

APPENDIX B

Guide to Track Numbers and Cross-References

Dissenting Views

This product is a group effort. Obviously, the process must begin with one member drafting a proposal, but we have tried, where possible, to reach consensus. Each recommendation has been circulated to the members of the Task Force and many proposals reflect member comments. Several proposals were changed after circulation of the original draft.

In spite of the foregoing, it should not be assumed that all members agree with the substance of every proposal, and certainly not with every word of the draft. In particular, one of our members, Diane E. Tebelius, who is an Assistant United States Attorney from Seattle, Washington, wishes it to be noted that while she values membership on the Task Force, she does not agree with all the views expressed herein.

Members were invited to express strongly held dissenting views. One, Kenneth C. Weil, wishes the following views to be noted with respect to Commission Track Number 211, dealing with the burden of proof.

"The Task Force proposes that a taxpayer's burden of proof in Bankruptcy Court should not differ from the taxpayer's burden of proof in other forums. The Task Force also proposes a complicated burden shifting rule if the trustee or creditor objects to the government's claim, rather than the debtor.

"In rebuttal, there is a view that the government should not receive treatment different from other creditors in bankruptcy courts. The prevailing rule in circuits where the government has the identical burden as other creditors can be expressed as follows: A properly filed claim constitutes prima facie evidence of a claim's validity; the debtor has the burden of rebutting this prima facie validity; if that burden is met, the creditor must present evidence to prove the claim. Franchise Tax Bd. of Cal. v. MacFarlane (In re MacFarlane), 83 F.3d 1041, 1044-1045 (9th Cir. 1996), cert. denied, ___ U.S. ___ (March 17, 1997).

"A primary objection to leaving the ultimate burden on the government is that the taxpayer has the records. However, if the taxpayer does not produce those records, then the taxpayer cannot rebut the prima facie validity of the proof of claim. Thus, the issue of "who has the records" is a red herring.

"The Task Force's burden shifting rule also adds unnecessary work for the creditor or trustee who objects to the government's claim.

"The government's burden of proof should be identical to any other creditor's."

Questions, comments or suggestions? kbercik@taxcounsellor.com

Last updated June 1, 1997

APPENDIX B

Guide to Track Numbers and Cross-References

Dissenting Views

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